Thursday 22nd November 2018

OPENING CALL: The Australian market looks to open higher with SPI Futures up 18 points.

Australia’s stock benchmark closed at levels last seen in February 2017 even while rebounding strongly from morning lows as commodities stocks again fell sharply.
Technology and other fast-growing stocks rebounded intraday, halting a stock-market selloff that has left investors on edge as to whether the longest bull market ever can regain its step.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

AUSTRALIA STOCKS:
Australia’s stock benchmark closed at levels last seen in February 2017 even while rebounding strongly from morning lows as commodities stocks again fell sharply. The S&P/ASX 200 fell 0.5% to 5642.8, finishing near the day’s high. The energy sector lost 2.5%, putting the past 2 weeks’ skid at 8%. The materials sector fared a bit worse today, falling 2.7% as metals prices were also hit overnight. But financial stocks again rose slightly today amid CBA’s 1.2% jump, health care rebounded 1.5% and REITs advanced 0.7%.

NEW ZEALAND STOCKS:
New Zealand’s stock benchmark fell for a seventh straight day, amid this week’s global stock slide. The market was pressured by a ho-hum update from a2 Milk. The NZX 50 closed down 0.55% at 8672.40 as the baby-formula company dropped 3.4%. Production partner Synlait shed 1.1%, though both continue to sport double-digit gains for 2018. Meanwhile, Fletcher Building fell 4.7%, extending yesterday’s selling after its downbeat guidance and hitting a 14-year low. But online marketplace Trade Me surged 16% after getting a NZ$2.54 billion (US$1.73 billion) buyout approach.

US Markets

Technology and other fast-growing stocks rebounded intraday, halting a stock-market selloff that has left investors on edge as to whether the longest bull market ever can regain its step. Shares of social networking firm Facebook, iPhone maker Apple and retail giant Amazon.com all notched gains in recent trading to pull major U.S. indexes higher after two days of selling wiped out $810 billion in value from the S&P 500. A recovery in oil prices helped send shares of Chevron and Exxon Mobil higher, while a handful of upbeat earnings reports also contributed to the gains. Investors were taking advantage of the deep drawdowns those stocks suffered in recent days, analysts said. The gains also followed news that Amazon.com and Apple were working on efforts to expand their businesses, and a TV interview in which Facebook Chief Executive Mark Zuckerberg addressed several controversies swirling around the social-media giant. Those stocks’ ability to buoy major indexes and stem the pullback underscores their influence, analysts said. It also shows that technology and other fast-growing stocks are needed to pull the stock market out of its hole. The Dow Jones Industrial Average was recently up 0.8%, while the S&P 500 added 1%. The tech-heavy Nasdaq Composite rose 1.6%. But even with Wednesday’s gains, the Dow industrials and the S&P 500 are down 0.2% for the year, leaving both indexes at risk for their first annual losses since 2015. The Nasdaq is up just 1.7% for the year, on pace for its weakest gain in seven years.

Commodities

IRON ORE: 70.63 + 0.57 (December contract)

Oil Futures

Oil prices rose, shrugging off a surprise inventory build in the U.S. as the market attempted to find a floor. Light, sweet crude for January delivery rose 2.2% to $54.63 a barrel on the New York Mercantile Exchange. Brent, the global benchmark rose 1.5% to $63.48 a barrel.

Forex

A lack of major economic data and few clear drivers left currency markets on the quieter side on the Wednesday ahead of Thanksgiving, as major pairs retraced some of the previous day’s moves. The ICE U.S. Dollar Index was down 0.2% at 96.694. This followed Tuesday’s rally, which coincided with a sharp drop in equity markets. The Dow Jones Industrial Average and S&P 500 erased all their 2018 gains. But stocks and more risk-sensitive currencies had recovered somewhat by Wednesday. The dollar’s main rival, the euro was stronger, retracing some of its losses from the previous day and last buying $1.1393, versus $1.1370 late Tuesday in New York. Trading in the British poundever suffering from the inconclusive drama surrounding Britain’s exit from the EU, was little changed Wednesday, with sterling buying $1.2777. Another key date for Brexit looms with an EU summit scheduled on the coming weekend.

European Markets

The Stoxx Europe 600 index closed up 1.1% at 355.07 as equities gain a boost ahead of the U.S. Thanksgiving holiday, with banks and miners broadly higher, the latter helped by higher metals prices. Germany’s DAX ended up 1.6%, while Italy’s FTSE MIB ended up 1.4% and the U.K.’s FTSE 100 up 1.5%. France’s CAC 40 closed up 1% and Spain’s Ibex 35 up 1.1%.

Asian Markets

Asian stock markets mostly fell early but improved from the worst levels of the day, including a flip to positive territory in Hong Kong, as the region’s trading tracked the drubbing Tuesday for U.S. stocks and oil futures. Both equities and oil markets indicated a Wednesday rebound was in order. Japan’s Nikkei was down 0.4%, moving close to its lowest point in a month as energy and electronics stocks slid. Oil explorer Inpex was down 3.2% while Sumitomo, which has various natural-resource investments around the world, lost 3.2%. Meanwhile, Olympus dropped 8.7% and Mitsubishi Electric was off 2.7%. Nissan shares reversed a bit of yesterday’s slide following the arrest of CEO Carlos Ghosn. Hong Kong stocks extended losses initially though the Hang Seng Index closed up 0.5% after dropping more than 1% early on. While tech stocks lagged overall, Tencent gained 2.8% and AAC rose 1.9%. Oil company Cnooc fell 2.5%. In mainland China, the Shanghai Composite and the smaller-cap Shenzhen Composite were both up slightly after early weakness. Energy stocks lagged after the latest plunge in oil prices Tuesday.

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